Arbitrage Betting is the term used when punters use bookmakers’ differing odds to make profits from matched bets.
Arbitrage is a term used in economics to describe the practice of taking advantage of a price difference between a number of markets. Traders or businesses make profits from the difference between market prices. Does this sound familiar to the matched betting blogs you’ve read and tutorials you’ve followed so far?
A quick glance at Wikipedia’s entry on arbitrage betting tells us as much. “When conditions allow,” it says, we can extract profits by “placing one bet per each outcome with different betting companies” to make a profit regardless of the outcome.
This is not quite the same as matched betting. The Yesbets What Is Matched Betting page describes match betting as placing back and lay bets to cover two opposite outcomes of an event. Often, when we match bets we will make a small initial loss. It is from the free bet promotional offers from bookmakers that we see the main profit to be made.
Arbitrage bets - or arbs - make profits in the first instance of matching a bet. We don’t then need the secondary free bet in order to make profit, though we can double the whammy and scoop an initial arb profit plus an additional promotional bet if results go our way.
Arbs become possible when the back odds sit higher than the lay odds. The Yesbets Oddsmatcher searches all odds for any specified market, or by any specified bookmaker. We can then use the matched betting calculator to place our matched bets, as the calculator shows up any potential profit or loss in the Max Profit column in the last box. Profits are highlighted green, losses are coloured red. You see what they did there?
It might seem tempting to solely make arb bets. Surely if we can make profit out of our first qualifying bet and extract secondary profits from the free bets we are on easy street to profit heaven? The bookmakers can pay for our cars, holidays and children’s education. Can’t they?
In one word, no. And here’s why.
Arbitrage Betting Will Get Your Accounts Restricted
Think about it. We know bookies are looking for punters who are cash cows. Namely, people who think they can make a profit from bookies and come out unscathed. But if you were a bookmaker and you see a punter actually making a profit out of you, what would you do?
Well, it’s possible that you might be ethical and take a karmic view on the situation, say “good luck” to that person and still enjoy vast profits from the millions of punters who don’t make profits out of you.
But this isn’t you. We’re talking about bookmakers. And bookies want to make a profit from every one of us. If a bookie spots you constantly making arb bets, it will restrict your accounts. This could come in the shape of limiting your odds or payouts, or limiting the promotional offers you can take up. Given that these promotional offers are our keys to maximising our profit from matched betting, we don’t want our promotional offers restricted, now do we?
That’s not to say that we can’t make some arb bets. But, in all fairness, bookies keep close eyes on exchanges to see where lay prices are going, so we might well find it hard to snip arb bets from the biggest bookmakers anyway.
How To Scoop Arb Bets
Arbs are most often possible with horse racing due to the constantly shifting nature of horse racing odds. The closer we get to the race, the more the odds tend to shift. Back odds may increase and catch up or overtake lay odds.
But this can be a dangerous game to play. Bookies, constantly keeping tabs on betting exchanges, have been known to slash odds as races loom, fearing overpricing a horse, giving up value and seeing arb bets become a very real possibility. When we match bets across bookmakers and exchanges, we must place a back bet at a bookie and a lay bet at an exchange. This only takes a few seconds, but those few seconds can mean the difference between a profit from an arb bet and a loss.
When we search for bets using the Yesbets odds matching software, we will notice that instant profit arb bets are most often found from a select set of certain bookies. A search for matched bets on any given day is near guaranteed to return a number of hits from these most prolific overpricing bookies as instant profit making arbs.
This is simply because these bookies don’t update their odds as quick as some of the other bookies. If you’re in the market for arbs, you’ll soon find you’ve made yourself a shortlist of the bookies who’re worth keeping funds in to jump on those instant-profit opportunities.
Maximising Profits From Arb Bets
Now, because the difference in odds often comes down to fractions we will have to lay some serious dough on an arb bet if we want to make a big profit.
Searching for manual matched bets on the Yesbets Oddsmatcher lists a number of arbs with fractional differences. Most commonly, the profit margin from arb bets can be as little as 1.2%. For instance, we might see that we can stand to take £2.01 profit from a £20 arb matched bet with back odds of 15 and lay odds of 13.
But what if we were to ramp that figure up to the nines? What if we were to place a £200 matched bet? Our profit margin remains the same, but the return is bigger because the outlay is bigger. So now we would see a £20.08 profit from a single bet.
It looks an attractive proposition, right?
But in placing these details into the Matched Betting Calculator we can see a few immediate issues. Not least that to make this bet, not only do we require the £200 to place the bet at the bookie, we also need a liability of £2779.92 in the betting exchange.
If we took it to another stratosphere entirely and placed a £2,000 bet at odds of 15, we could earn £200.77 from just a single matched bet. But in order to scoop this haul we would be looking at a liability of a jaw-dropping £27,799.23.
So let’s say that your matched betting adventure is going well. You are following the Yesbets tutorials and are a keen participator in the private Facebook group. You have avoided having any of your accounts restricted and are doing quite nicely, thank you very much. You’ve got £2779.92 in your exchange and find an arb bet that will make you £20 profit at the blink of an eye. So you decide to go for it.
As you might expect, if you’ve been building up a punter profile and have been making small-to-medium sized bets on football games and suddenly swan in with a £200 bet on a horse race, your bookie is going to raise its proverbial eyebrows.
This is out of character, they might think. John never has coffee at home.
You might get away with it. But you also might get gubbed or have your account restricted. The bookie you’re placing your arb bet with, though a tad lackadaisical when it comes to monitoring odds differences on the betting exchange, may well be quicker to gub or restrict punters who regularly take advantage of their slow updates. Especially to that kind of magnitude.
Price Boost Arb Gold
But then come the price boost promotions. Bookies entice us to bet. They dangle carrots of ad-hoc price boosts as an incentive for punters to place those bets. So, rather than offering odds of 2 for a favourite to win a low-profile midweek horse race a bookie might bump those odds to 2.2 or 2.5. During the Premier League season, these kind of boosts come thick and fast on match results, first goalscorer, over/under and scores of other markets.
Yesbets updates its Reloads page with these price boost offers, while members of the Facebook group also chip in with any additional price boosts they have noticed in their matched betting trawls. Taking advantage of these boosts is an excellent way of earning instant profits from arbs while coming across to bookmakers as regular punters - so long as these aren’t the only bets we ever place.
After all, the bookies are tempting us to bet with price boosts, so why shouldn’t we? All we’re doing is matching our bets off to ensure that we never lose. And what could possibly be the problem with that?